Prime Minister Narendra Modi and his Sri Lankan counterpart Ranil Wickremesinghe, after their delegation level and restricted format talks, said the countries were determined to take the relationship to the next level as the two sides signed four agreements to deepen cooperation in health care and space science.

Thanking Wickremesinghe for choosing India for his first overseas trip after becoming Prime Minister for the fourth term, Modi hoped that the country will achieve "genuine reconciliation" and development so that all people including the Tamil community can live a "life of equality, justice, peace and dignity" in a united Sri Lanka.

The Prime Minister said both the countries will intensify cooperation in combating terrorism and work together for security and stability in the maritime neighbourhood.

"We recognise our closely aligned security interests and the need to remain sensitive to each other's concerns. We both reaffirmed our commitment to deepen our defence and security cooperation," he said.

Modi, who is the first prime minister to visit the island nation after Rajiv Gandhi's trip in 1987, said Sri Lanka is India's largest partner in defence training programme and it will continue to expand cooperation in this area.

On the fishermen issue, the Prime Minister said it was agreed that fishermen's associations on both sides should continue their efforts to find a solution.

"I conveyed to him that this should be seen as a humanitarian issue that affects livelihoods. I informed him of the steps we are taking to encourage Indian fishermen to take up deep sea fishing," he said.

The issue of comprehensive economic partnership agreement between the two countries figured in the talks and the Sri Lankan Prime Minister hoped that it will be finalised by next year.

"Your (Sri Lanka's) progress is important for our two countries, South Asia and our maritime region," Modi said.

He said the relationship between the two countries touches the hearts of ordinary Indians and Sri Lankans and that both the countries have a "huge stake" in each other's success, and in stability and development in the region.

Sri Lankan President Maithripala Sirisena had also chosen India as his first overseas destination after being elected to office in January.

Seeking deeper economic engagement, Modi sought support for Indian investors who are keen to participate in Sri Lanka's economic development, especially in infrastructure, energy and transport sectors.

"We welcomed some significant developments in bilateral relations since March, including the currency swap arrangement. We also expressed hope that progress on key bilateral initiatives and projects will gather speed now," he said.

Calling his discussions with Wickremesinghe "excellent", Modi said India would like to see the bilateral trade grow and become more balanced for Sri Lanka.

"We discussed how we can achieve these goals in a more open and competitive Indian market, including through bilateral arrangements for trade and investments," the PM said adding he offered India's full support to strengthen connectivity between the two countries.

Sri Lanka is India's major trading partner in South Asia. The bilateral trade between India and Sri Lanka in 2013-14 was $5.23 billion with Indian exports amounting to $3.98 billion and Sri Lankan exports amounting to $678 million.

Modi said he assured Wickremesinghe of India's continuing commitment to its development partnership - in infrastructure, railways, energy, community development projects, agriculture, capacity building, science and technology, space and civil nuclear field.

"We will continue to nurture people-to-people ties. We just finished an absorbing test series. We shall all miss the great Kumar Sangakara on the cricket field," Modi said.

The Prime Minister also congratulated Wickremesinghe for leading the United National Front to victory in last month's parliamentary elections.

"Sri Lanka has voted twice this year for change, reforms, reconciliation and progress. There can be no stronger statement of Sri Lanka's democratic tradition. There can be no clearer sign of Sri Lanka's march towards a peaceful, inclusive, and prosperous future.

"As a close neighbour and friend, we wish Sri Lanka every success, rejoice in your progress and assure you of India's unwavering support," he said.